Obama budget calls for reversing deep spending cuts

Obama calls for sequestration reversal — deep spending cuts that had an outsized impact in Maryland.

President Barack Obama revived his call Thursday for an end to deep cuts in federal spending, an appeal that fell squarely in the divide between Republicans in Congress who want to rein in costs and those who want to boost the Pentagon's budget.

Obama has repeatedly asked Congress to "fully reverse" the so-called sequestration cuts that were part of a 2011 deal and intended to be so unpalatable they would never be enacted. But they took effect in 2013 after lawmakers failed to reach a compromise to avert them.

Now several factors give renewed life to Obama's pleas, particularly on defense spending: a shrinking deficit, a new Republican-led Congress and the Pentagon's need to fund the fight against Islamic State militants who continue to seize land and terrorize cities across Iraq and Syria.

Economists said the cuts had a particularly harmful impact in Maryland, which has a large military presence and benefits from an outsized proportion of federal spending. Washington spent $93 billion in Maryland in the fiscal year that ended in September 2013, ranking the state third in the nation in per capita spending.

"This administration has been very clear, as have our military leaders, about the fact that sequestration is a bad policy," White House spokesman Josh Earnest said Thursday. "It's certainly been bad for our economy, and it's bad for our national security as well, and that's why the president proposes to end it."

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The new Republican majority in Congress could be interested in repealing some of the spending limits, especially on national security, but few Republicans are willing to stomach Obama's proposed tax hikes to pay for his expanded budget and are bracing for a months-long fight.

"President Obama's reckless spending has resulted in record federal deficits each year causing $7 trillion in new debt," said Rep. Andy Harris, Maryland's sole Republican in Congress and a member of the House Appropriations Committee.

"Instead of partnering with us to balance the budget, he wants to irresponsibly ignore the budget caps," Harris added.

The president is asking lawmakers for $561 billion in defense spending, an increase of $38 billion over the congressionally mandated budget caps. On top of that, the military is set to receive $51 billion in war funding.

Obama's plan also includes $530 billion in domestic expenditures, an increase of $37 billion over this fiscal year.

The White House discussed only top-line numbers Thursday, not specific programs that they propose to increase. Obama intends to unveil his budget Monday.

Though the full brunt of sequestration was never fully felt across the country — in large part because Congress limited its severity — economists said it has had an effect in Maryland, Virginia and other states closely tied to the federal government.

"Sequestration has helped to lay low the Maryland and Virginia economies," said Anirban Basu of the Baltimore consulting firm Sage Policy Group. "Contractors of all types are screaming, particularly defense contractors, but even [National Institutes of Health] grant recipients."

Democrats from Maryland and elsewhere have long complained about the cuts.

"The sequester is undermining the ability of our country to grow our economy as robustly as it ought to be grown," said Rep. Steny Hoyer, a Southern Maryland lawmaker and the No. 2 Democrat in the House. "And the sequester, of course, requires irrational spending cuts both in defense and nondefense."

Maryland Sen. Barbara A. Mikulski, the top-ranking Democrat the Senate Appropriations Committee, said she would push for "Maryland's fair share to help families get ahead, not just get by."

Some 45,000 civilian defense employees in Maryland were estimated to be furloughed in 2013 to help the Pentagon save $37 billion under the spending cuts — though some of those furloughs were later canceled.

The first details of Obama's budget proposal came as Harford County residents were preparing to attend a meeting Thursday to voice concern about potential cuts at Aberdeen Proving Ground. The meeting was expected to draw senior Army officials to discuss the potential reduction of 4,300 civilian and military jobs at the installation over the next five years.

"The president is facing an exceedingly difficult situation in Congress," said Ryan Crotty, the deputy director at the Center for Strategic and International Studies. "It can't try to increase spending and be everything to everyone. Because, in the end, no one's going to be happy."

Republicans prefer shifting the money around — aiding the Pentagon by cutting into the vast system of domestic programs they say is bloated. In the past, Republicans have suggested cuts to food stamps, Obamacare and programs to help homeowners who owe more on their mortgages than their homes are worth, among others.

"The House of Representatives has passed several replacements for the president's sequester, only to have them ignored," noted Rep. Mac Thornberry of Texas, the Republican head of the House Armed Services Committee.

But both Obama and Congress face a deadline to ward off the worst of the cuts.

When they initially identified the deep, across-the-board spending cuts, no one really thought the plan would be implemented. The cuts were considered so terrible — $1 trillion worth of reductions over the decade, affecting almost every aspect of government — that the architects believed the parties would be forced to broker a compromise on other spending reductions.

But the cuts went into effect after Congress failed to reach a deal.

However, a subsequent pact brokered in 2013 between Republican Rep. Paul Ryan of Wisconsin and Democratic Sen. Patty Murray of Washington temporarily reversed some of the reductions.

That reprieve ends Oct. 1, when the new fiscal year begins, and without agreement by then, Washington could see another major confrontation between the White House and Capitol Hill.

"If Congress rejects my plan and refuses to undo these arbitrary cuts, it will threaten our economy and our military," Obama wrote in an op-ed in the Huffington Post.

Rep. Chris Van Hollen, a Montgomery County lawmaker and the top Democrat on the House Budget Committee, said how the budget plays out will depend on the debate within the Republican caucus over whether to relent on spending in order to support the military.

"Two years ago, there was a recognition among most Republicans that the defense caps should be readjusted and the result of that was the Ryan-Murray agreement," he said. "So I would hope that we can move forward on some kind of similar agreement."

To warn against the negative effects of cuts, top uniformed officers of the Army, Navy, Air Force and Marine Corps, testified Wednesday on Capitol Hill about how the reductions would devastate their services.

The joint chiefs, as they're known, said that the spending freeze affected the military's ability to be ready for battle and slowed the modernization of weapons, which made it impossible to plan.

The past year saw a number of unforeseen national security threats, they said, including the battle against the Islamic State, a resurgent Russia in Ukraine and other events that demanded military action, such as the spread of Ebola in Africa.

"Sequestration will erode the trust that our young men and women in uniform, civil servants and families have in their leadership," said Gen. Joseph Dunford, commandant of the Marines. "And the cost of losing that trust is incalculable."

In a study released in April, the Pentagon outlined the impact of spending cuts, including a drop to 420,000 active-duty soldiers from 470,000 in the Army, the retirement of a Navy aircraft carrier, and scrapping the tankers that refuel fighter and bomber jets in midair.

Obama's open-ended strategy to confront Islamic State fighters in Iraq and Syria has cost $1.3 billion since it began in August, according to the Pentagon. While that's still a pittance compared to the total Pentagon budget or to the separate $1.3 trillion spent for the ground wars in Iraq and Afghanistan, the costs of intervention are certain to increase under the plan to step up airstrikes, intensify surveillance and conduct counterterrorism operations.

Despite the budget uncertainty, the Pentagon has moved forward with big-ticket purchases that stretch for decades, including a $348 billion nuclear weapons modernization effort that involves new bombers and submarines, as well as the $400 billion F-35 Joint Strike Fighter jet program.

"The Department of Defense has not prepared the services or the contractors for any budget cuts," said Todd Harrison, defense analyst at the Center for Strategic and Budgetary Assessments. "They seem to be in denial about the whole thing."